Adesto Technologies Corporation revenue jumped on 48.8% while EBITDA Margin dropped on 13.0 pp from -4.0% to -16.9%
02/21/2019 • About Adesto Technologies Corporation (
$IOTS) • By InTwits
Adesto Technologies Corporation reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Adesto Technologies Corporation is a growth stock: 2018 revenue growth was 48.8%, 5 year revenue CAGR was 10.9% at 2018 ROIC -28.3%
- The company operates at negative EBITDA Margin: -16.9%
- Adesto Technologies Corporation motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -12.5% for the sames years
- Adesto Technologies Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's in pair with industry average of 20.0%
- CAPEX is quite volatile: $3m in 2018, $3m in 2017, $2m in 2016, $1m in 2015, $1m in 2014
- The company has unprofitable business model: ROIC is -28.3%
- It operates with high leverage: Net Debt/EBITDA is 12.6x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Adesto Technologies Corporation's Revenue jumped on 48.8%. Revenue growth showed acceleration in 18Q4 - it increased 73.8% YoY. Revenue decline was slowing down on average by 15.4 pp per annum in 2014-2018. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.72 pp from -0.47% to 0.26% in 2018.
Gross Margin decreased on 5.8 pp from 49.0% to 43.2% in 2018. During 2014-2018 Gross Margin topped in 2017 at 49.0%. SG&A as a % of Revenue decreased on 5.4 pp from 32.5% to 27.1% in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2016 at 40.3% and was declining since that time.
Net Income margin dropped on 15.5 pp from -10.1% to -25.7% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 3.8%. Adesto Technologies Corporation's CAPEX/Revenue increased on 2.6 pp from 1.3% in 2015 to 3.8% in 2018. Average CAPEX/Revenue for the last three years was 4.9%.
Return on investment
The company operates at negative ROIC (-28.3%) and ROE (-44.8%). ROIC dropped on 16.4 pp from -12.0% to -28.3% in 2018. ROE dropped on 21.7 pp from -23.1% to -44.8% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 12.6x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2018. Debt surged on 122% while cash dropped on 71.3%.
Adesto Technologies Corporation has no short term refinancing risk: cash is higher than short term debt (6,120.6%).
Financial and operational results
FY ended 12/31/2018
Adesto Technologies Corporation ($IOTS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 41.465 | 43.259 | 43.968 | 56.112 | 83.490 | 48.8% |
| Gross Profit | 15.933 | 18.484 | 21.350 | 27.475 | 36.061 | 31.3% |
| SG&A | 9.567 | 12.323 | 17.719 | 18.212 | 22.592 | 24.1% |
| EBITDA | -5.028 | -3.945 | -8.081 | -2.225 | -14.134 | |
| Net Income | -8.934 | -8.383 | -11.612 | -5.688 | -21.440 | |
Balance Sheet
|
|---|
| Cash | 5.972 | 23.089 | 19.719 | 30.078 | 8.630 | -71.3% |
| Short Term Debt | 10.749 | 5.606 | 8.273 | 2.426 | 0.141 | -94.2% |
| Long Term Debt | 0.122 | 7.814 | 9.775 | 10.908 | 29.418 | 169.7% |
Cash flow
|
|---|
| Capex | 0.760 | 0.559 | 2.481 | 2.868 | 3.208 | 11.9% |
Ratios
|
|---|
| Revenue growth | -16.5% | 4.3% | 1.6% | 27.6% | 48.8% | |
| EBITDA growth | 242.7% | -21.5% | 104.8% | -72.5% | 535.2% | |
|
|---|
| Gross Margin | 38.4% | 42.7% | 48.6% | 49.0% | 43.2% | -5.8% |
| EBITDA Margin | -12.1% | -9.1% | -18.4% | -4.0% | -16.9% | -13.0% |
| SG&A, % of revenue | 23.1% | 28.5% | 40.3% | 32.5% | 27.1% | -5.4% |
| Net Income Margin | -21.5% | -19.4% | -26.4% | -10.1% | -25.7% | -15.5% |
| CAPEX, % of revenue | 1.8% | 1.3% | 5.6% | 5.1% | 3.8% | -1.3% |
|
|---|
| ROIC | -31.2% | -23.1% | -28.5% | -12.0% | -28.3% | -16.4% |
| ROE | | | -56.9% | -23.1% | -44.8% | -21.7% |
Adesto Technologies Corporation ($IOTS) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 15 | 18 | 22 | 28 | | 35.3% | 35.6% | 43.9% | 73.8% |
| EBITDA | -0 | -3 | -6 | -6 | | | | | -873.5% |
| Net Income | -1 | -5 | -8 | -7 | | | | | |
Balance Sheet
|
|---|
| Cash | 30 | 8 | 13 | 9 | | 68.9% | -75.1% | -56.5% | -71.3% |
| Short Term Debt | 3 | 0 | 0 | 0 | | -47.1% | -100.0% | | -94.2% |
| Long Term Debt | 10 | 29 | 29 | 29 | | -1.3% | 244.9% | 119.7% | 169.7% |
Ratios
|
|---|
| Gross Margin | 46.9% | 42.7% | 43.7% | 41.1% | | -2.2% | -7.4% | -5.3% | -6.8% |
| EBITDA Margin | -1.1% | -14.6% | -25.8% | -20.1% | | 16.1% | -8.0% | -25.0% | -24.7% |
| Net Income Margin | -7.2% | -27.8% | -38.3% | -24.5% | | 17.3% | -14.8% | -31.8% | -23.5% |
Peers in Semiconductors
Below we provide Adesto Technologies Corporation benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| NVIDIA Corporation ($NVDA) | | 13.4% | 7.0% | 37.9% | 40.6% |
| |
|---|
| Median (67 companies) | 54.6% | 9.7% | 5.2% | 10.9% | 4.7% |
|---|
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 46.4% | 47.7% | 47.2% | 48.7% | 51.0% |
|---|
| Adesto Technologies Corporation ($IOTS) | 38.4% | 42.7% | 48.6% | 49.0% | 43.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.9% | 11.5% | 9.2% | 10.7% | 10.0% |
|---|
| Adesto Technologies Corporation ($IOTS) | -12.1% | -9.1% | -18.4% | -4.0% | -16.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.6% |
|---|
| Adesto Technologies Corporation ($IOTS) | 1.8% | 1.3% | 5.6% | 5.1% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.7% | 3.8% | 1.7% | 3.2% | 5.2% |
|---|
| Adesto Technologies Corporation ($IOTS) | -31.2% | -23.1% | -28.5% | -12.0% | -28.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (46 companies) | -0.5x | -0.2x | 0.2x | 0.4x | 0.3x |
|---|
